He saw a monster in the house

My nephew talking about this mysterious monster he saw upstairs. He was afraid going upstairs because "it" was there. During dinner he said "monster upstairs". "Monster is not happy. Monster hungry monster want to eat meat." I kid you not I got chills. My heart dropped lol.
Few days later he came over to my house and said the monster is now at my house upstairs O_O My brother-in-law and I follow him to show where the monster was. He went from room to room. When he open the closet "I found Noonie." We ran so fast downstairs lol. It was a spooky moment.
One time he pick up a toy that was never broken before. "Monster real. They broke it."
Are kids making up stories? Or do they really have wizard eyes?